Azumah Resources Limited (ASX:AZM) will raise $2 million by way of a fully underwritten share purchase plan (SPP) with proceeds to advance the company’s interest in the Wa Gold Project in Ghana, West Africa.
These funds will boost the company as it progresses towards completing a feasibility study by the end of the year.
The SPP provides the opportunity for eligible shareholders to subscribe up to $15,000 worth of new shares without incurring brokerage or other transaction costs.
Azumah managing director Stephen Stone said this was an exciting year for the company having delivered a material ore reserve upgrade and a feasibility study progress update demonstrating a robust project.
He said: “The discovery of substantial below-pit mineralisation at the Kunche and Bepkong deposits has been another exciting development with this mineralisation not yet included in resources, reserves or development plans.
“The fully underwritten SPP is a glowing endorsement of the company’s prospects ahead as it now focuses on the completion of its feasibility study by year-end.”
These new shares will be offered to eligible shareholders free of brokerage and fees.
The SPP is fully underwritten by Paterson Securities Limited which has been mandated to act as a lead manager and underwriter to the offer.
Additionally, Azumah has agreed to grant Patersons the right to facilitate an offer of new shares to eligible shareholders and sophisticated investors at the same price as those under the plan for about $1 million.
JV partner approaches 42% stake
The company’s joint venture partner Ibaera Capital GP Limited is approaching the expenditure hurdle where it will have earned a 42% interest in Azumah Resources Ghana Limited (AZG) as well as the Wa Gold Project.
The discovery of below-pit mineralisation at Bepkong and Kunche has seen the requirement for an additional US$2.25 million budget to complete the feasibility study, which has been approved by the JV parties.
Stone said: “The transformative joint venture with Ibaera has been a great success and Azumah looks forward to continuing to work with Ibaera’s highly regarded team of industry professionals.”
Once Ibaera has expended its US$11.25 million the company has the right to contribute its pro-rata 5.7% interest of the approved US$2.25 million program or it can elect to dilute.
If Azumah elects not to contribute, Ibaera can earn up to an additional 5% interest to a maximum of 47.5% in the project, such additional interest determined having regard to the current value of the project.